Dealership Refusing to Refund Deposit...

In My Humble Opinion
21

[QUOTE=Book Monster]
She knew she was making a deposit, she just didn’t necessarily realise the deposit was non-refundable.
[/QUOTE]

That’s true, of course. But you said they no “no documentary evidence” to prove that she agreed to any terms and conditions. However, that’s not true; they have a fairly significant peice of evidence, which is a $4000 deposit on a credit card.

Put yourself in the shoes of Visa’s claims department, or an arbitrator or a small claims judge; if your Mom says “I didn’t agree to anything,” the first question she’ll be asked is “Then why did you give them four thousand dollars? That seems like a lot of money to give someone when you hadn’t agreed to anything.”

Not that you might not win, and I do kind of see your side of it, because the issue of refundability is still up in the air, But it’s not going to be easy, and you would be well advised to ask a lawyer.

22

Some very good points raised here so far. What happens if we shift the goal-posts slightly and instead of saying “I didn’t agree to the terms and conditions”, she says “I didn’t know the deposit was non-refundable and didn’t agree to that.”?

23

[QUOTE=Book Monster]
She asked for the car in black, but how would this prevent the dealer from simply selling it to someone else? It’s not like she asked for a totally pimped-out version that they’d have trouble selling…
[/QUOTE]

The dealer has to pay the manufacturer certain fees, special orders, interest on inventory, etc. If Former Marine Guy comes along, he’ll know more about it. The dealer may not be out 4 grand, but they may have some costs directly related to this car. You have few options and a weak position. I still say your best bet is to try negotiating a smaller forfeiture, or buy a car from them, outside that I think your sucking wind.

24

[QUOTE=Book Monster]
Some very good points raised here so far. What happens if we shift the goal-posts slightly and instead of saying “I didn’t agree to the terms and conditions”, she says “I didn’t know the deposit was non-refundable and didn’t agree to that.”?
[/QUOTE]

Where’s the logic in that. It’s a deposit, that implies some performance. They performed!
What if I advertise something in the classifieds, then a guy shows up who wants it but he won’t have the money 'til he gets paid. He asks me to hold it and I say sure, just give me a deposit. He comes back a few days later having changed his mind and wants his money back. Should I give it to him? Hell no, I lived up to my part of the bargain. Even if I didn’t tell him it was non-refundable, it was implied.

25

[QUOTE=Book Monster]
Some very good points raised here so far. What happens if we shift the goal-posts slightly and instead of saying “I didn’t agree to the terms and conditions”, she says “I didn’t know the deposit was non-refundable and didn’t agree to that.”?
[/QUOTE]

My only argument to that would be, “well, what did you think the deposit was for?”’

Yes, there are refundable deposits, but I think that in general they’re not.

Also. . .do you think this the first time the dealership has had this happen? They probably have a document prepared by a lawyer that is their “standard operating procedure” for taking deposits over the phone. I’d be willing to bet they DID inform your mom that the deposit was non-refundable, or that at least if it came down to “your word against mine”, they know how to fight that battle.

26

[QUOTE=Book Monster]
IIn all honesty I don’t think that my mother, kindly and trusting soul that she is, did actually realise the deposit was non-refundable. She hasn’t bought that many cars after all, and I believe she received the contract for her to sign in the mail after she paid the deposit by phone.
[/QUOTE]

You are in a weak position, but I think this is your best shot. Try and emphasize your mother didn’t really understand what she was getting into, rather than them not being able to legally enforce it. They may decide to cut her a break based on that.

However, if your mother negotiated this deal herself, and is inexperienced in the car buying process it’s quite possible she didn’t negotiate a good price and the dealership really will not be able to sell the car at the price your mother agreed to.

27

IANAL, but I term I have often heard is “meeting of the minds”. As i understand it, in order for a contract to be valid, both parties must agree to, and understand all the aspects of the contract. If she insists she thought the deposit was refundable, or that the contract that was sent to her did not match what was discussed on the phone, she might be able to get out of it. In my opinion, if the dealership was worried about selling the car, they would not have ordered it until they had a signed contract.

28

I am not a lawyer.

Anything your mother can do to get out of it would depend on where she lives. For instance, I know that in Nevada there is no such thing as a verbal contract - everything must be in writing or it is ineligible. Therefore, if she lived in Nevada, she would be entitled to her money back because she never signed the contract or a slip for the credit card charge.

However, one state over in California, I believe that verbal contracts are legally binding. So it depends. She needs to ask a lawyer.

~Tasha

29

[QUOTE=RedSwinglineOne]
IANAL, but I term I have often heard is “meeting of the minds”. As i understand it, in order for a contract to be valid, both parties must agree to, and understand all the aspects of the contract.
[/QUOTE]

Also known as offer, consideration, and acceptance.

30

I don’t know where you’re based, but if you’re here in the U.K., we have laws on distance selling, and because it was done by phone, she has 7 days from then to change her mind. She should consult a lawyer.

You know, I can’t bring to mind any instance of a deposit that’s refundable if you don’t go through.

31

[QUOTE=Book Monster]
Some very good points raised here so far. What happens if we shift the goal-posts slightly and instead of saying “I didn’t agree to the terms and conditions”, she says “I didn’t know the deposit was non-refundable and didn’t agree to that.”?
[/QUOTE]

IANAL. I am a Law Student. I am currently enrolled in Contracts. My professor clerked on the Supreme Court. Ok then.

Verbal contracts are contracts, that is correct. But there is a limit. Certain types of contracts must be in writing under a scheme called the Statute of Frauds, which at the very least has been around since before the US was a country, but is currently immortalized in the Uniform Commercial Code section 2-201 (law in all states but Louisiana)

Under the Statute of Frauds, a contract in the sale of goods valued over $500 MUST BE IN WRITING to be enforcable. If it is not in writing, it is “voidable” meaning that while it becomes whole in the event of full performance (completion of the sale of the car), until that time you can back out without breach. In other words, in the sale of goods over $500 a verbal agreement does not make a contract that the court will enforce.

Ok, so on to the “written instrument” ie the contract they sent her. Under the Uniform Commercial Code (law in all states but Louisiana) section 2-207, in a sale of goods between a merchant (car dealer) and non-merchant (Mom) the a writing (contract) with additional terms beyond the original agreement, there are special circumstances. Although the written contract is an Agreement to Mom’s Offer for a Price, the additional terms must be Expressly Agreed to by the non-merchant party, otherwise they just drop out and do not become part of the agreement (ie, contract). In other words, she would ABSOLUTELY have to sign the contract in order for any part of it beyond was discussed on the phone to have any legal weight.

(BTW, this is why you have to click “I agree” to the terms on a piece of software you download before you can begin to use it. If you do not click “I agree” those terms do not apply)

So that sounds all super-duper for your mom. However, there is what we law students like to call “a proof problem.” Let’s say Dealer claims he told her the deposit was non-refundable over the phone. Unless she can prove, by 51% of the evidence, that he never told her, she’s a little bit out of luck.

WARNING: This is NOT LEGAL ADVICE. These are the rambling of a 1st year law student.

32

I am not a lawyer either–but don’t most places have a three day return lemon law in place? Take the car and then return it stating it wasn’t what you wanted! I was always under the impression on any major purchase the buyer has three days to back out of it. Keep in mind that I am likely wrong here–but since this isn’t in GC I don’t have to prove it :slight_smile: So stick it–oh wait I am not in the Pit either!

33

The three day rule is much misunderstood:
http://www.ftc.gov/bcp/conline/pubs/buying/cooling.htm
The “lemon laws” are a whole different thing and are state laws, not federal.

34

[QUOTE=A.R. Cane]
The three day rule is much misunderstood:
http://www.ftc.gov/bcp/conline/pubs/buying/cooling.htm
The “lemon laws” are a whole different thing and are state laws, not federal.
[/QUOTE]

Well there you go. Figured I was probably wrong! Thanks for the link.

35

Seems like if a deposit were refundable, it wouldn’t be worth a thing as a deposit.

36

[QUOTE=Hello Again]

Under the Statute of Frauds, a contract in the sale of goods valued over $500 MUST BE IN WRITING to be enforcable. If it is not in writing, it is “voidable” meaning that while it becomes whole in the event of full performance (completion of the sale of the car), until that time you can back out without breach. In other words, in the sale of goods over $500 a verbal agreement does not make a contract that the court will enforce.

[/QUOTE]

I believe that in NY the statute of frauds does not apply to deposits (though I imagine it varies from state to state).

37

Even if there’s case law to favor this buyers position, she’d still have to go to court. Who’s going to do that over 4 grand. A letter from a lawyer might help, but I still say it’s better to try to negotiate a settlement, than to pursue a legal case.

38

[QUOTE=Hello Again]

Verbal contracts are contracts, that is correct. But there is a limit. Certain types of contracts must be in writing under a scheme called the Statute of Frauds, which at the very least has been around since before the US was a country, but is currently immortalized in the Uniform Commercial Code section 2-201 (law in all states but Louisiana)

[/QUOTE]

Um, no. The Uniform Commercial Code is not law in any state. It’s a uniform act, as explained here:

It does not become law unless and until it is enacted by a state legislature. Even then, there are some variations in certain provisions. The UCC has been widely adopted, but outside of law school, you generally refer to the specific state statute.

39

Darnit, I hate it when you’re right.

It is Article 2 (Sale of Goods) that has been enacted in every state but Louisiana.

So, everything I said in my post still applies, since its all in Article 2, but I spoke incorrectly.

40

[QUOTE=Troy McClure SF]
Seems like if a deposit were refundable, it wouldn’t be worth a thing as a deposit.
[/QUOTE]

In many situations, a deposit serves the purpose of ensuring the item won’t be sold to someone else until you get a chance to complete the sale (i.e. protecting the consumer), rather than protecting the seller.

Say I order something from the local electronics store, they say “yep, we can get that for you”. I say “great, but I can’t make it in for a couple of days”, they say “no problem, just give us your credit card number and we’ll put a deposit down to hold it for you”.

It’s entirely possible the OP’s mom could have thought this was what the deposit was for.